Delta May Save Pension Plan

Delta Air Lines might still attract the private investment needed to exit bankruptcy even if it holds onto its expensive, non-union pension plan, Gerald Grinstein the airline's chief executive officer, told reporters at a Capitol Hill news conference on Wednesday. Grinstein said Delta would maintain the plan covering 91,000 non-union workers and retirees if Congress approves pension legislation within the next few weeks allowing airlines to stretch their contribution schedules. Delta still will terminate its plan covering pilots mainly because of an expensive option that allows for lump sum payments. Total pension liabilities for Delta exceed $6 billion. Appearing with Grinstein to lobby lawmakers for pension reform was Northwest Airlines chief executive Douglas Steenland; he said Northwest would likely try to terminate its three employee pension plans in bankruptcy if the final Congressional bill did not meet its expectations. Northwest's pension deficit is more than $3.5 billion. Both companies, who would like to leave Chapter 11 behind by next year, also said terminating pensions would probably extend their stay in Chapter 11. A small group of U.S. House of Representative and Senate negotiators agreed in principle Wednesday on a final version of legislation to strengthen traditional employer pension plans, lawmakers report. Northwest and Delta are insisting on 20 years to close their pension funding gaps, up from the typical corporate allowance of seven. But there were no guarantees whether that timetable would still avert termination of the airline's plans to save money.

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